Strategic CSR - Arctic Sea Ice

This animated series of graphics, unfortunately, needs no commentary:

http://nsidc.org/sotc/sea_ice_animation.html

I saw similar graphics from the National Arctic Ice Data Center in an article in the FT that is in the url below:

“September 2007 was the first time in living memory that the entire Northwest Passage was open water from east to west. In 2008, despite slightly more ice, a record six private yachts transited the historic waterway, and this year's traffic could beat that number.”

It is all quite somber reading:

“Scientists, some of whom predict the Arctic could be ice-free in the summer of 2037, warn there is a multiplier effect at work. Much of the ice that melted in recent years was thick ice that had accumulated over many years. But while much of the ice-free area this summer will freeze over in winter, that ice will be fragile and break up more easily next summer.”

Have a good weekend.
David

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther/


COUNTDOWN TO COPENHAGEN
Oil quest heats up in Arctic Canada
By Cameron Dueck on the Bering Sea,
904 words
16 July 2009
Financial Times

http://www.ft.com/cms/s/0/4f5858ba-7153-11de-a821-00144feabdc0.html
or
http://www.desdemonadespair.net/2009/07/melting-ice-threatens-polar-life.html

Strategic CSR - Walmart

The article in the url below covers an announcement by Walmart last summer to introduce sustainability-related information (such as a product’s carbon footprint and other resources used in its production and consumption) into product labeling:

“As the world's largest retailer, Wal-Mart Stores is on a mission to determine the social and environmental impact of every item it puts on its shelves. … The idea is to create a universal rating system that scores products based on how environmentally and socially sustainable they are over the course of their lives. Consider it the green equivalent to nutrition labels.”

The firm announced a five year plan to develop and introduce the system, which it expects will diffuse among other retailers. What is particularly interesting about the article is both the tone (Walmart as a genuine and progressive thought-leader on sustainability) and the support Walmart now enjoys among environmental activists:

“The only thing less likely than a Wal-Mart meeting that sounds as if it were dreamed up by liberal-arts environmentalists may be that a number of scholars and environmental groups say that Wal-Mart is the only entity capable of making ''sustainable consumption'' a retailing reality.”

As with other sustainability policies the firm has introduced, Walmart sees this move as motivated by its business interests:

“Wal-Mart executives said that more and more consumers, especially those born from 1980 to 2000, will be making purchasing decisions based not only on price but also on which products do the least harm to the environment and the people, often in poorer countries, who produce them.”

Since its announcement, this initiative has grown into a multi-industry effort that, given Walmart’s size and reach, has the potential to change the way firms interact with their consumers concerning CSR. It has also attracted a lot of attention in the press. In a recent edition hailing the Top 50 Most Innovative Companies, for example, Fast Company cited the firm’s sustainability policies, in general, and this labeling plan, in particular, as the main reason for placing Walmart at No.9 in the list (http://www.fastcompany.com/mic/2010/profile/walmart).

Take care
David

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther/


At Wal-Mart, Labeling To Reflect Green Intent
By STEPHANIE ROSENBLOOM
1036 words
16 July 2009
The New York Times
Late Edition - Final

http://www.nytimes.com/2009/07/16/business/energy-environment/16walmart.html

Strategic CSR - Russell Athletic

The article in the url below reports changes made by Russell Athletic, due to activist pressures brought by a nationwide student anti-sweatshop campaign (United Students Against Sweatshops, http://usas.org/):

“[The campaign’s] pressure tactics persuaded one of the nation's leading sportswear companies, Russell Athletic, to agree to rehire 1,200 workers in Honduras who lost their jobs when Russell closed their factory soon after the workers had unionized.”

The activist organization, which has been building its campaign over a decade, has focused on persuading universities to ensure the firms they enter into apparel licensing contracts with adopt codes of conduct to protect the rights of their suppliers’ employees. The campaign, which turned its focus on Russell in January last year:

“… persuaded the administrations of Boston College, Columbia, Harvard, New York University, Stanford, Michigan, North Carolina and 89 other colleges and universities to sever or suspend their licensing agreements with Russell.”

The campaign also picketed NBA sporting events because of Russell’s relationship with the league and also retail outlets that stock Russell, such as Sports Authority.

The success of the campaign demonstrates that firms will react once it becomes evident their stakeholders are unhappy with an aspect of their business model and are willing to act on it in a way that threatens profits:

“In its agreement, not only did Russell agree to reinstate the dismissed workers and open a new plant in Honduras as a unionized factory, it also pledged not to fight unionization at its seven existing factories there.”

Understandably, a Russell spokesman:

“… declined to discuss why Russell had adopted a friendlier attitude toward unionization after years of aggressively fighting unions.”

Take care
David

Bill Werther & David Chandler

Strategic Corporate Social Responsibility

© Sage Publications, 2006

http://www.sagepub.com/Werther/

Labor Fight Ends in Win For Students
By STEVEN GREENHOUSE
1126 words
18 November 2009
NYTF
Late Edition - Final

http://www.nytimes.com/2009/11/18/business/18labor.html

Strategic CSR - Singularity University

The article in the url below provides an update on Singularity University, which was the focus of a Newsletter last spring:

“Singularity University, a new institution that aims to educate "a cadre of leaders" about the rapid pace of technology and to address humanity's grand challenges, such as climate and health (http://singularityu.org/).”

The article is a diary of a renewable energy entrepreneur’s first week at the school as part of:

“… the inaugural "student" class of 40 entrepreneurs and scientists from around the world, selected from more than 1,200 applications.”

The range of topics covered day-to-day (from DNA, to artificial intelligence, to biofuels, to supercomputers) give an indication of the broad sweep and ambitious goals of the course:

“This is the purpose of Singularity University - to examine the risks and opportunities of technology. For the next few weeks I will be reporting on some of the insights from robotics, biotechnology, nanotechnology and more, and ideas that address water and energy shortages and climate challenges.”

The sense of opportunity and challenge that Singularity University is designed to capture comes across strongly:

“Sometimes you aim for the moon and get surprisingly close.”

The author’s final installment from his 9-week course at Singularity is at:
http://www.ft.com/cms/s/0/dd882d4a-9cd7-11de-ab58-00144feabdc0.html

Have a good weekend.
David

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther/

 South Park meets Harvard Business School
Daniel, Simon
912 words
20 August 2009
Financial Times
London Ed1
12
http://www.ft.com/cms/s/0/25d9d480-8d20-11de-a540-00144feabdc0.html
or
http://www.consortmoney.com/news-details.aspx?newsID=14200

Strategic CSR - Green-collar Jobs

The article in the url below details a plan to refurbish the Empire State Building to make it "more energy efficient":

"The retrofit, which will include 6,500 better insulated windows, as well as high-tech lighting, furnaces and air conditioners, is expected to reduce the building's energy use by almost 40 per cent."

On the positive side, the scale of this project (which, after all, is only for one building) indicates the potential for "green-collar jobs" in the U.S. It also indicates the potential these kinds of projects have to drive economic growth in the near future more generally.

On the negative side, however, the scale of the project also demonstrates the size of the task ahead. If this is what is needed to convert one building (albeit a big one), then how long and how much money would it take to refurbish the whole of New York City. And that is only the buildings. What about the task of turning around a whole economy? We currently have a model of economic growth that is founded on waste. Turning that around with a renewed focus on sustainability presents a mammoth task:

 "The global potential for energy efficiency is vast. This year, McKinsey calculated that in the US alone an investment of $520bn would cut non-transportation energy in the country by 23 per cent of projected energy demand - which would save the US economy more than $1,200bn."

There is some hope, however:

"Energy efficiency is benefiting strongly from government stimulus packages globally, many of which single out efficiency as a key target for spending. Of a total of $350bn so far allocated to green endeavours under the stimulus packages, the energy efficiency sector is due to receive more than half."

 There are also some interesting graphics at the same ft.com url. One, in particular, underscores the argument often heard from developing economies-that the issue of climate change is one that was created by past economic development by developed countries and, as such, it is these economies that need to bear the burden of fixing it. This graphic lists the amount of carbon emissions, per country/region, from 1950-2007 (amounts in billions of tons):

Canada - 5.8
India - 8.0
Japan - 12.1
China - 28.7
Russia - 34.2
Europe - 43.2
U.S. - 68.4

Take care
David

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther/

 Savings potential scales new heights
By Fiona Harvey in London and Sheila McNulty in Houston
878 words
21 August 2009
Financial Times
Asia Ed1
17
http://www.ft.com/cms/s/0/1812bffe-8da4-11de-93df-00144feabdc0.html
or
http://www.wbcsd.org/Plugins/DocSearch/details.asp?ObjectId=MzUzODk

Strategic CSR - Free2work

The Newsletter below (the Wag, http://www.rightreality.com/wag/) is written and distributed by David Batstone. I advertised his work in a CSR Newsletter last November, but thought his campaign for more ethical and sustainable supply chains was also worth passing on:

“In a world that is so globalized, where do the products I purchase originate? We often know so little about the resources, practices, and labor that bring even everyday objects into our lives. What human rights are being violated in order for me to live the lifestyle I do, and how can I change my life to put an end to those violations? It is baffling that for even the simplest things in our lives this question cannot be answered so simply.”

He outlines his thoughts in his commentary in the edition of the Wag below (‘Where is my t-shirt from?’) and points those who are interested in more detail to his free2work website (http://www.free2work.org/).


Have a good weekend.
David

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther/

Strategic CSR - CEOs

The article in the url below by Mallen Baker (Foreword, pxiii) presents an argument in support of the modern CEO and a critique of the short term nature of many business decisions today:

“Chief executives come in with impossible expectations, knowing that the moment they fail to meet them, they will be out. They demand huge returns because if they’re only going to be in the job for two or three years (which is now the average tenure) and they don’t know how damaged they will be at the end, they want to know they will be financially secure. And many of the perceived failings are out of their control. Any chief executive today could be fired because the stock price is below where it was a couple of years ago. And everyone would be angry at any pay-off as being a “reward for failure”.”

While Baker’s argument is valid, CEOs cannot have it both ways. While many CEOs are certainly blamed for events for which they should not be held responsible, they are also given way too much credit for success that is either largely independent of their actions (e.g., the whole market or industry is doing well) or occurred in spite of their dazzling new strategies. If CEOs want the room for error for which Baker is arguing (which, I agree, would be a positive step for business), they also need to accept compensation packages that more accurately reflect the limited contribution of a single, often flawed, individual.

Take care
David

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther/


Leadership – All fail the chief
If chief executives were given more time to succeed, there would be fewer rewards for failure
Mallen Baker
June 12, 2009
http://www.ethicalcorp.com/content.asp?ContentID=6500
or
http://www.volans.com/wp-content/uploads/2009/09/ethicalcorp_reporting_june09.pdf

Strategic CSR - SEC

Over the weekend, I was reading the BusinessWeek article in the url below about socially responsible investing (Issues: Investing, p184). The article was interesting, but what really caught my eye was this paragraph:

“On Jan. 27 the U.S. Securities & Exchange Commission approved a standard that requires public companies to weigh the impact of climate-change laws and regulations when deciding which information to disclose in corporate filings. The SEC said companies should also consider international accords, indirect effects such as reduced demand for goods tied to greenhouse gas production, and physical impacts such as the potential for increased insurance claims in coastal regions due to rising sea levels in their assessments.”

This seems to be a pretty big deal to me. Yet, I read multiple newspapers a day and I haven’t seen any articles about this announcement. Did I miss it? If the SEC really is requiring publicly-traded firms to “weigh the impact of climate-change laws and regulations when deciding which information to disclose in corporate filings,” that has the potential to alter significantly both the degree and kind of information firms release. As such, I would think it has ramifications similar to those sought by the movement to require executives to consider stakeholders beyond their shareholders in making decisions (e.g., see http://www.c4cr.org/).

Did anyone catch this when it was announced and do you have any thoughts on whether this is potentially as important as I think it is?

Take care

David

Bill Werther & David Chandler

Strategic Corporate Social Responsibility

© Sage Publications, 2006

http://www.sagepub.com/Werther/

Social Investing Gathers Momentum

By David Bogoslaw

February 3, 2010

Niche no more: Socially responsible funds are putting up impressive performance numbers—and their reach is spreading

http://www.businessweek.com/investor/content/feb2010/pi2010023_247094.htm

Strategic CSR - CSR Stress Test

The article in the url below is the feature of today’s Newsletter not because of its content, which is not particularly revealing, but because it demonstrates the evolution of the free market publication, The Economist’s, position regarding CSR. Ostensibly, the article looks at the extent to which CSR funding has been affected by the recession:

“As firms grapple with a brutal economic downturn, they are taking a long, hard look at the resources they devote to everything from supporting charities to making their activities carbon-neutral.”

According to a survey by Business for Social Responsibility, so far, the cuts have predominantly been to:
“Most of the cuts have been to corporate-philanthropy budgets, which typically fund charities and NGOs. For instance, Citigroup’s charitable foundation says it expects to make $63m of grants in 2009, down from $90m last year.”

More fundamental attitudes have also been affected, however:

“… a survey of 329 corporate-travel managers and business travellers published in February by the Association of Corporate Travel Executives found that only 17% of them now ranked environmental sustainability as a high priority, compared with 29% a year ago.”

And, some large scale investment projects have been scaled back:

“American Electric Power (AEP) chose to delay its plans to build a wind farm in Indiana when the heavily indebted utility found its cost of capital had soared because of turmoil in the corporate-bond market.”

In spite of all this, however, the article is surprisingly upbeat. While most firms are cutting back, the over-riding drive is cost-cutting and efficiency, and other firms (such as Walmart) see sustainability as a means to change old habits and achieve broader business goals. The article highlights recent moves by IKEA, as well as the chocolate producers, Mars and Cadbury, to build sustainable supply chains:

“So the preliminary results of the CSR stress-test are encouraging. Many firms really do seem to have found ways of making the world better while making money at the same time. A few, such as America’s GE, have built entire business models around sustainability.”

Importantly, the perception among consumers is that CSR still presents the opportunity for competitive advantage:

“Consumers’ consciences have “not been put on hold.””

Firms also see CSR issues as a way to maintain morale and keep and attract staff:

“Firms that can show they stuck to their sustainable ways during the recession may find it easier to attract the brightest talent when the economy recovers.”

The article also sees CSR as a way to re-build confidence and trust in business more generally. It argues that it was corporate social irresponsibility that got us into the financial crisis and that, as such, CSR offers us a way out.

It has been interesting to watch The Economist’s view of CSR evolve over the last five years, or so. The magazine reluctantly acknowledged the growing relevance of CSR in a 2005 special report, gradually became sold on the business case for CSR in a 2008 special report, but this is the first time I remember the magazine advocating a broader social and more moral justification for CSR—it is good to have them on board.

Have a good weekend
David

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther/

Corporate social responsibility: A stress test for good intentions
May 14th 2009
LONDON AND SAN FRANCISCO
From The Economist print edition
The recession is a test of companies’ commitments to doing good
http://www.economist.com/businessfinance/displayStory.cfm?story_id=13648978
or
http://www.tano.org/en/art/383/

Strategic CSR - BP

The recent shift in priorities at BP away from alternative fuel sources and back to carbon-based energy is confirmed in the article in the url below:

“… having led the charge, BP is now leading the retreat. When the world does move beyond fossil fuels, neither BP nor any other big oil company is likely to be in the vanguard. … Alternative energy provides less than 1 per cent of BP's revenues and none of its profits. Capital spending will be about $20bn this year, of which at most 5 per cent will go into renewable energy.”

The article makes for depressing reading as BP’s CEO, Tony Hayward (who replaced John Browne in 2007), appears to be sacrificing long term prospects for short term financial strength:

“As one former BP executive puts it, … while the rest of the world is trying to move forward, Mr Hayward is "turning the clock back".”

As a result of its pullback, BP is losing the influence it once had in this section of the market:

“Over the next three years, BP is likely to invest about $2.5bn in renewables. In the same period Eon, the German electricity and gas group with about half BP's market capitalisation, expects to invest more than twice as much in wind and solar power.”

The article argues that the uncertainty inherent in renewable energy and the immediate pressures on BP for financial results have led to this shift in policy. There is no escaping the medium- to long term trend, however, as well as the CEO’s responsibility to position his or her company effectively for the transition when it occurs:

“A hundred years ago, the world's fuel was primarily coal. Today it is oil. In the future, it will be renewable energy. By 2050, perhaps 50 per cent of our energy will be non-carbon-based.”

An interesting sidebar in the article traces the problem back to the firm’s July, 2000 re-branding (Issues: Brands, p153), which, it argues, raised expectations too high and left no-one satisfied:

“Launched in July 2000, the slogan - with a new logo and a lavish advertising budget - sent BP's brand awareness soaring in the US and helped it craft an image as the world's best-run oil company. Critics argued that it also sent a message to the majority of the company's workforce that theirs was an outdated part of the business. It also set BP up for attacks from green campaigners, who could never be persuaded that the company had done enough to live up to its promise.”

Take care
David

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther/

Back to petroleum
Crooks, ED
2485 words
8 July 2009
Financial Times
Asia Ed1
07
http://www.ft.com/cms/s/0/b8626bf4-6b20-11de-861d-00144feabdc0.html
or
http://royaldutchshellplc.com/2009/07/08/back-to-petroleum/

Strategic CSR - CEOs

The article in the url below argues that firms are currently ill-served by the stock markets and managers that craft strategies designed to maximize short term share price are doomed to fail. As a result, the authors recommend six actions that CEOs should take to “decouple their long-run strategies from the short-run vagaries of financial markets”:

“• Jettison quarterly guidance.
• Reduce dependence on external capital.
• Focus on individual and not institutional investors.
• Rethink compensation.
• Innovate via adjacencies rather than breakthroughs.
• Invest and acquire countercyclically.”

The authors outline their arguments for each recommendation. Many of the ideas seem intuitive in terms of strategic CSR. Taken together, however, they present a compelling case for change to a long term perspective in forming strategy and managing day-to-day operations.

Take care
David

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006


CEOs, it is time to decouple from financial markets; Long-term strategy should be divorced from the vagaries of the share price
Govindarajan, Vijay Sundaram, Anant
832 words
21 April 2009
Financial Times
London Ed1
14
http://www.ft.com/cms/s/0/6d6f36c0-2da1-11de-9eba-00144feabdc0.html
or
http://readingpad.blogspot.com/2009/04/ceos-it-is-time-to-decouple-from.html